The most optimistic investment bank has appeared? Barclays: S&P 500 could potentially exceed 6,000 points.
Barclays pointed out that if the earnings of large-cap tech stocks continue to exceed expectations, coupled with a rebound in earnings from other industries, the S&P 500 could reach 6050 points, with earnings per share reaching $252.
With the Pro UltrPro Shrt S&Pro 500 recently breaking through 5000 points and continuously setting historical record highs, Wall Street analysts have raised their year-end target for the index.
In the latest report released on Tuesday, Barclays Bank raised its target price for US stocks from 4800 points to 5300 points, expecting US stocks to continue benefiting from the profits of large tech companies and the unexpected performance of the US economy.
Of particular note, Barclays' US stock strategist Venu Krishna pointed out:
If the profits of large tech companies continue to exceed expectations, then the Pro UltrPro Shrt S&Pro 500 will reach 6050 points in a bullish scenario, with earnings per share reaching $252.
Barclays further pointed out that the outstanding performance of large tech stocks, coupled with the rebound in profits from other industries, is key to the bullish scenario. Overall, the risk/reward tends towards a bull market, with recent macroeconomic data indicating a greater likelihood of economic reacceleration than a slight recession.
Barclays: Performance of Large Tech Stocks Determines Pro UltrPro Shrt S&Pro 500 Target Price
Barclays stated in the report that the US economy is expected to withstand the "headwinds of high interest rates" in 2024, with super large tech stocks continuing to meet the most optimistic profit targets. As a result, the target stock price for the Pro UltrPro Shrt S&Pro 500 in 2024 has been raised from 4800 points to 5300 points, and the expected earnings per share have been raised from $233 to $235.
US inflation is expected to continue normalizing, and the economy remains relatively resilient. Large tech companies will maintain their leading position in profit growth. We have revised the earnings per share for the Pro UltrPro Shrt S&Pro 500 for the 2024 fiscal year to $235.
This is about 3% lower than the consensus expectation of $243, with the difference coming entirely from the components of the Pro UltrPro Shrt S&Pro 500 excluding tech stocks. While market consensus has been declining for some time due to decreasing inflation, sustained pressure on profit margins, and slowing economic growth outside the US, these factors remain unfavorable for earnings per share of the Pro UltrPro Shrt S&Pro 500 excluding tech stocks.
Our earnings per share expectation for the components of the Pro UltrPro Shrt S&Pro 500 excluding tech stocks remains at $163, about 5% lower than the general expectation of $171. However, earnings per share expectations for large tech companies have significantly improved, raising the overall earnings expectations for the Pro UltrPro Shrt S&Pro 500.
In addition to the basic scenario, Barclays has provided two forecasts for a bull market and a bear market, mainly focusing on the uncertainty surrounding the performance of large-cap tech stocks, reflecting the increasing influence of tech stocks on the entire U.S. stock market.
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Bull Market Scenario: If large-cap tech stocks continue their strong momentum, and assuming that the negative correction of tech stocks has bottomed out, we may see the Pro UltrPro Shrt S&Pro 500 rise to 6050 points with earnings per share of $252.
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Bear Market Scenario: However, if large-cap tech companies fail to meet quarterly profit expectations, and if there is unexpected weakness in the macro economy, we may see the Pro UltrPro Shrt S&Pro 500 fall to 4500 points with earnings per share of $221.
Analysts have been raising their target prices for U.S. stocks as the market continues to rise.
Not only Barclays, but as U.S. stocks rise, analysts are also raising their target prices.
UBS has raised the target price of Pro UltrPro Shrt S&Pro 500 to 5400 points, citing a strong U.S. economy, higher inflation reflecting strong demand, which is positive for U.S. stocks. Goldman Sachs believes that there is still room for this tech bull market, far from the madness of 1999.
Yardeni Research has adjusted the year-end target price to 5400 points, expecting it to reach 6000 points in 2025 and 6500 points in 2026. According to Yardeni, the strong performance of the U.S. economy and increased productivity will drive the rise of U.S. stocks.
Capital Economics predicts that by the end of 2025, the Pro UltrPro Shrt S&Pro 500 will reach 6500 points, but this is contingent on U.S. stock valuations under the AI frenzy reaching levels similar to the peak of the Internet boom.